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Wednesday 28 May 2008
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Microsoft shares fall on Vista


By Richard Blackden
Last Updated: 9:34pm GMT 16/02/2007

Microsoft shares were under pressure in New York after the software giant warned that Wall Street analysts are too optimistic about future sales of its Windows Vista operating system.

In an update on the company’s plans, chief executive Steve Ballmer said: “Some of the revenue models and revenue forecasts I’ve seen out there for Windows Vista are overly aggressive.” He added: “I don’t think that much new money will race out of consumers pockets into PCs.”

Shares in Microsoft dropped 2pc to $28.82 in early trading in New York. The much-hyped new version of Microsoft Windows is the company’s first new PC operating system for five years.

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The launch is critical to Microsoft because it is the engine of the company’s profit. Estimates vary on Wall Street for how much revenue Vista will generate in the financial year that starts in July.

Goldman Sachs, for example, is predicting 10pc growth in sales. Microsoft has forecast a 11pc-12pc increase in sales in the current financial year, which ends in June. Vista has already run into some problems.

Apple, the long-standing rival of Microsoft, has urged users of iPods not to upgrade their PCs to the Vista system until it comes up with a compatible version of the software that runs iPods.

Microsoft said it has team working on compatability issues between Vista and iTunes and assured users they had no reason not to upgrade their software.

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